Wine, pasta, orange juice—these are some of the items many of us were thinking about when US president Donald Trump imposed tariffs on Canadian goods, and triggered counter tariffs on American imports, earlier this month. Less attention has been paid to the effect a possible trade war would have on health care, where around 40 percent of Canada’s imported medical devices come from south of the border.
“If Ontarians do not believe a trade war will be bad for our publicly funded health care system, I am here to tell you I am worried sick as an hallway ER doctor,” tweeted Raghu Venugopal, a Toronto-based emergency physician. Anthony Dale, president and CEO of the Ontario Hospital Association, also expressed concern. Tariffs and counter tariffs could bring many risks to the province’s health care system, “including the disruption of access to vital equipment and supplies,” he said in a statement.
And while a thirty-day pause was announced after a whirlwind three days of economic negotiations, some health care organizations are still sounding the alarm. Patients, providers, and insurance companies could see a spike in health costs, on pacemakers, insulin pumps, and artificial hip joints, says Medtech Canada, a national association that represents the medical technology industry in the country—that is, companies that provide MRI parts when machines break down or make the mechanical valves used when a surgeon replaces the diseased portion of a heart.
Unlike sticker shock at the grocery store, the challenges the health care system will face might not be immediately recognizable to people outside the industry. Hospitals operating on tight budgets may struggle to absorb these additional expenses, potentially affecting the availability of health care services. “The integrated nature of the North American supply chain of medical technologies means that tariffs from both sides of the border will reduce market access and impact the affordability and accessibility of health care in both Canada and the US,” Nicole DeKort, president and CEO of Medtech, wrote in a letter to Finance Minister Dominic LeBlanc.
There’s been similar worry around Canada’s stock of medications. “There’s a concern here that any sort of tariff war on this space could send ripples throughout the supply chain,” Mina Tadrous, assistant professor at the University of Toronto’s Leslie Dan Faculty of Pharmacy, told Global News. That’s because while Canada does manufacture 44 percent of its medications, it relies heavily on the US, India, and Europe for the ingredients that go into those drugs, according to a 2022 Ernst and Young study. The paper found that our most imported medicines are gastrointestinal drugs (for reflux, ulcers, and other conditions) and “anti-infectives” (antibiotics, antifungals, and so on).
We don’t have to look too far back in history to understand the effect of supply chain issues on health care. In 2020, provinces were caught off guard by the rapid spread of COVID-19 and the intense pressures it put on suppliers of medical equipment. Hospitals have used something called a “just-in-time” strategy—developed by Toyota in the 1970s to save money—for replacing inventory: if you don’t order something until inventory is low, you’re less likely to spend on stuff you don’t need, and stock won’t sit around potentially expiring. (Yes, even N95 respirator masks expire after a few years.) At the time, Dale told the Toronto Star, “Gone are the days of hospitals having massive warehouses.”
The problem with this approach is that it doesn’t function well in unexpected situations that see sudden spikes in demand: like a global pandemic, or a trade war with an unpredictable world leader. We’re still dealing with post-pandemic supply chain challenges today. And supply problems have become more frequent in recent years, partially because manufacturers have consolidated their operations, making the industry as a whole more vulnerable to disruptions. Add to that Canada’s small market—the country represents only 2 percent of global drug and medical sales, according to the federal government. Data from Innovation, Science and Economic Development Canada indicates most of our medical devices are imported from the US, yes, but also from China (17 percent), Mexico (7 percent), and Germany (5 percent).
Some of this will hopefully change soon. “I am concerned about health product shortages and the impact that shortages can have on Canada’s public health care, including for children and families,” wrote Health Minister Mark Holland in June 2024. That month, his department introduced “Building Resilience: Health Canada’s Plan to Address Health Product Shortages,” a plan that outlines what the government would do over the next four years to mitigate shortages. First, the department would monitor the supply of crucial products—ones that present the greatest risk to patients if they were to run out. Second, manufacturers would be obligated to report possible shortages ahead of time. And third, the government would improve regulatory frameworks to make it easier for new manufacturers to enter the market in Canada.
A lot of this is still in progress. One report suggests that Canada has seen some growth in medical tech manufacturing at home. From 2017 to 2022, Canadian medical device exports increased from $3.8 billion to $5.1 billion, which could speak to our increased manufacturing. But we’re still struggling with the unavoidable; many newer producers rely on the US for raw materials and parts, such as the resin used to make injection moulding.
For now, Medtech and others are hoping health care materials will be exempt from whatever comes our way next month. But it’s hard to remain hopeful in an uncertain situation—one that likely might change again before anyone has time to parse the downstream effects of supply chain crashes.
